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Abbott Laboratories Downgraded by MBO

- By Alberto Abaterusso

MBO downgraded Abbott Laboratories (ABT) from outperform to market perform. The analysts' average target price is now $48 per share as reported by The Street.

The new target price per share set by analysts at BMO represents a 0.3% upside from the analysts' average target price of $47.85 which ranges between a low of $41 and a high of $52.

Source: Yahoo Finance

BMO's new target price per share represents a 6.5% upside from the current share price of $45.05.

As of Tuesday, analysts suggested buying shares of Abbott Laboratories with a recommendation rating of 1.9. The recommendation rating ranges between 1.0 (Strong Buy) and 5.0 (Sell). Seven analysts out of a total of 17 recommended buying shares of Abbott Laboratories.

Source: Yahoo Finance

Abbott Laboratories closed at $45.53 Monday, down 19 cents or 0.42% from the previous trading day, with 7,040,547 shares traded on the New York Stock Exchange. The average volume of shares traded on the NYSE over the last 10 trading days is 6.01 million and the average volume of shares traded on the stock market over the last three months is 9.09 million.

The company has a market capitalization of $77.88 billion and an enterprise value of $81.91 billion. Therefore, according to the current share price, the stock is trading at 3.23 times the book value and at 17.86 times the EBITDA, which is $4.59 billion.

Over the last 12 trailing months, revenue was $20.85 billion, and EPS amounted to $2.2.

The stock is less volatile than the market with a beta of 1.54. The forward price-earnings (P/E) ratio is 16.39.

Abbott Laboratories is a faithful issuer of dividends and distributes a total of $1.06 per share every year through quarterly payments of 26.5 cents for a dividend yield of 2.32%. With a free cash flow of approximately $2.2 billion that can be generated every year, Abbott Laboratories has plenty of funds to sustain the payment of the dividend to its shareholders.

Source of data: Google Finance

In 2016 Abbott Laboratories paid dividend for a total amount of about $1.54 billion to the shareholders.

Abbott Laboratories has 1.73 billion shares outstanding and nearly all of them can be traded on the stock market. Insiders of the U.S. global health care company hold approximately 0.21% of the company's total shares outstanding, and institutions hold approximately 70.50% of shares outstanding.

It can rely on a total liquidity of approximately $24 billion to pay its debt obligations, to fund its pipeline and for other business purposes.

Among the top institutional holders, the Vanguard Group Inc. stands out with a volume of 102,188,529 shares held, or approximately 6.94% of the company's total shares outstanding, valued approximately $3.9 billion at Dec. 31, 2016.

In addition, Abbott Laboratories has informed the market that Senior Vice President Michael Warmuth, Established Pharmaceuticals, will retire on March 31.

Disclosure: I have no positions in Abbott Laboratories.

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This article first appeared on GuruFocus.